I can't say enough positive things about Lightroom! I have had it for about 4 months and there is a real learning curve, I will admit. However, it is an amazing program that I wish I had had 4 yrs ago! I use a lot of software for many different purposes and this is one of the best in terms of ease of use and functionality.
It consists of two distinct, but overlapping, sectors (plus more, but for simplicity's sake, I'll leave it at two). One is the "Library" module and the other is the "Develop" module. The Library module is a database manager which allows essentially an infinite amount of image sorting, collection creation, naming, flagging with icons or key words, etc. All this is done without actually touching the image file. The database consists of a set of pointers that allow you to file/find/see your images easily.
The Develop module is the image editing module. Features of it are accessible by key combinations from within the Library module. Usually, the Develop is invoked and the editing panel is present with each edit procedure accessible by key combinations or clickable icon/movable slider. I assume that the editing subroutines are taken almost directly from other Adobe products such as Photoshop, although the names of the functions served by those routines may be different in Lightroom. The editing is pretty straightforward. I bought a book (Lightroom 2: Streamlining your Digital Photography Process by Nathaniel Coalson) to help me learn the database side of things. Good book. With Develop, changes made in one image can be easily applied to a batch of images. Again, all changes are "virtual." That is, notations about your desired modifications are kept in the database and not actually burned into the original image file. That is the way things stay, unless you want to change them. The vast majority of necessary editing can be done directly in Lightroom. In some instances, it may be desirable to do more advanced editing. With a click or two, the Lightroom image is transferred to some other editor such as Photoshop where you can make your changes, then return directly to Lightroom where the Photoshop-edited image is now present.
Until implementing Lightroom, I had been relying on Picasa. I was and continue to be a fan of Picasa. Picasa is free and does a lot, particularly for quick image viewing and 1 click editing. However, Lightroom is so, so, so much better that the comparison is night and day. Picasa was very easy to slip into, but if you stay with it too long, it is hard to leave. Picasa is really designed for creating email-able small images, not for working with and retaining the quality of original photos. Picasa tends to degrade image quality (it cannot even save in TIF format, for example, let alone in a RAW format), whereas Lightroom retains image quality (although you can certainly degrade it if you wish). Although Picasa operates according to database management principles, it is much more limited than Lightroom. In my experience, one of the most difficult aspects of digital photography is the sheer number of images generated. That being the case, a high quality database manager designed for image management is of utmost necessity. Give it a look. I got a faculty discount copy for under $100. Really, really worth it.